Gas dips below $4 a gallon after months of pump pain

The U.S. national average gas price has dropped back below $4 a gallon, per AAA, a sign of Americans' pain at the pump easing after months of war in Iran.

The big picture: Iran's squeeze on oil traffic through the Strait of Hormuz battered the global economy. But crude prices in June fell to their lowest levels in over three months on news of an extended ceasefire agreement between the U.S. and Iran.

• The agreement is designed to restore shipping through the strait, but even with a full reopening, U.S. pump prices will likely remain higher than pre-war levels for some time.

Driving the news: The national average is now $3.9990 a gallon, per AAA.

• A year ago, the average was $3.1880.
• Diesel prices remain over $5 per gallon, though they, too, have fallen from recent highs.

Friction point: The extended ceasefire doesn't mean President Trump's domestic political pain is gone, especially in midterms where affordability is top of mind.

• As gas prices soared, majorities of Americans in multiple polls blamed Trump to some level for the pump shock.
• Trump and his allies have insisted the temporary pain is worth preventing a nuclear Iran.
• Trump's defiant rhetoric gave Democrats ready-made midterm ads, especially when he said "I don't think about Americans' financial situation."

Yes, but: The economic mood across American households improved for the first time in five months as gas prices eased, per the University of Michigan's consumer sentiment index.

What we're watching: If crude oil prices continue to fall, gas prices should follow.

• But the disrupted market will take time to reorient itself, and Gulf oil producers that cut production can't immediately revive it.

Go deeper: Gas prices are dropping — but they're still high